Caller ID Law Could Impact CUs

Credit unions that engage in legitimate debt collection practices could still find their actions restricted by the Federal Communications Commission.

The agency has until June to write rules to implement a law passed by Congress aimed at cracking down on businesses that cause caller identification services to translate "misleading or inaccurate" caller information aimed at defrauding or wrongfully obtaining something of value.

The FCC needs to provide exemptions so as not to ensnare those who are operating properly, according to an advisory memo from the Philadelphia law firm Ballard Spahr. Congress passed the law, the Truth in Caller ID Act, last December.

Because the law "neglects to define ‘misleading or inaccurate’ caller ID information or the phrases ‘cause harm’ or ‘wrongfully obtain anything of value,’ it could conceivably be interpreted to reach collection calls by creditors and debt collectors that do not involve legally false information simply if the person called can allege some breach of privacy, emotional distress or a mistake or technical deficiency of some kind as to any amount paid as the result of the call," according to the law firm’s memo.

Barbara S. Mishkin, an attorney at the firm, said in an interview that "the language is so vague that until there is more clarity credit unions and others are in limbo land."

If the FCC doesn’t carve out an exemption, credit unions and others could find themselves in trouble if the caller ID displays an abbreviated form of the caller’s legal name rather than the caller’s complete legal name.

Violations are punishable by a civil penalty of up to $10,000 for each violation or three times that amount for each day of a continuing violation. Penalties for continuing violations can’t exceed $1 million. Violators could also face criminal fines or imprisonment.

When lawmakers considered the legislation it wasn’t controversial. The Senate approved it by unanimous consent and the House approved it on a voice vote.

Mishkin said the measure, which amends the Communications Act of 1934, deals with a legitimate problem but she hopes the FCC doesn’t go too far.

"There have certainly been instances of people being dishonest when identifying themselves on caller identification. But people who are doing what they are legally entitled to do shouldn’t be prevented from collecting what is owed to them," Mishkin said.